Quality issuers with AAA credit ratings such as sovereigns, supranational banks, government agencies and blue-chip corporates found it easy to raise debt last year. Investors had the jitters and wanted safe bonds that were easy to sell. But there wasn’t much high-grade paper around for them to buy because many governments had small budget deficits and were not issuing much debt.
As a result of this imbalance between supply and demand, most AAA-rated bonds issued last year ended up oversubscribed even when the rate of interest on offer was extremely low.
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